Stablecoins have the potential to reshape the landscape of global financial transactions, but the key to large-scale adoption lies in bridging the gap between on-chain ecosystems and the broader economy.

The global financial system is currently in the midst of profound transformation. Traditional payment networks, with their outdated infrastructure, lengthy settlement cycles, and high fees, are facing comprehensive challenges from emerging alternatives—stablecoins. These digital assets are rapidly revolutionizing the models for cross-border value transfers, enterprise transaction paradigms, and the ways individuals access financial services.

Over the past few years, stablecoins have continued to evolve, becoming an essential underlying infrastructure for global payments. Major fintech firms, payment processors, and sovereign entities are progressively integrating stablecoins into consumer-facing applications and enterprise financial flows. Meanwhile, a series of emerging financial tools—from payment gateways and fiat on/off ramps to programmable yield products—have significantly improved the convenience of stablecoin usage.

This report conducts an in-depth analysis of the stablecoin ecosystem from both technical and business perspectives. It examines key participants shaping this sector, the core infrastructure supporting stablecoin trading, and the dynamic demand driving its applications. Additionally, it explores how stablecoins are giving rise to new financial use cases, as well as the challenges faced in their broader integration into the global economy.

1. Why Choose Stablecoin Payments?

To explore the influence of stablecoins, we must first examine traditional payment solutions. These traditional systems include cash, checks, debit cards, credit cards, international wire transfers (SWIFT), Automated Clearing House (ACH), and peer-to-peer payments, among others. Although integrated into daily life, many payment channels, such as ACH and SWIFT, have infrastructures dating back to the 1970s. While revolutionary at the time, today these global payment infrastructures are largely outdated and highly fragmented. Overall, these payment methods suffer from issues such as high fees, high friction, lengthy processing times, lack of 24/7 settlement capabilities, and complex back-end processes. Additionally, they often (and at extra cost) bundle unnecessary services like identity verification, lending, compliance, fraud protection, and banking integration.

Stablecoin payments effectively address these pain points. Compared to traditional payment methods, blockchain-based payment settlements significantly simplify payment processes, reduce intermediary steps, and provide real-time visibility of fund flows, thereby shortening settlement times and reducing costs.

The main advantages of stablecoin payments can be summarized as follows:

• Real-time Settlement: Transactions are completed almost instantly, eliminating delays found in traditional banking systems.

• Security and Reliability: Blockchain’s tamper-proof ledger ensures transaction security and transparency, providing protection for users.

• Cost Reduction: Removing intermediary processes significantly lowers transaction fees, saving users money.

• Global Coverage: Decentralized platforms can reach underserved markets (including unbanked populations), achieving greater financial inclusion.

2. Stablecoin Payment Industry Landscape

The stablecoin payment industry can be divided into four technical stack layers:

1. Layer 1: Application Layer

The Application Layer mainly consists of various Payment Service Providers (PSPs) that integrate multiple independent fiat on/off-ramp institutions into unified aggregation platforms. These platforms offer convenient ways for users to access stablecoins, tools for developers building at the application layer, and credit card services for Web3 users.

a. Payment Gateways

Payment gateways are services that securely process payments, facilitating transactions between buyers and sellers.

Prominent companies innovating in this space include:

• Stripe: A traditional payment provider integrating stablecoins like USDC for global payments.

• MetaMask: Does not directly provide fiat-to-crypto exchange services; users can perform on/off-ramp operations through integration with third-party services.

• Helio: Supports 450,000 active wallets and 6,000 merchants. Through Solana Pay plugins, millions of Shopify merchants can settle payments in cryptocurrency, instantly converting USDY into other stablecoins such as USDC, EURC, and PYUSD.

• Web2 payment apps like Apple Pay, PayPal, Cash App, Nubank, Revolut, etc., also allow users to make payments with stablecoins, further expanding stablecoin use cases.

The payment gateway providers field can clearly be divided into two categories (with some overlap):

1) Developer-oriented Payment Gateways; 2) Consumer-oriented Payment Gateways. Most providers tend to focus more heavily on one category, shaping their core products, user experiences, and target markets accordingly.

Developer-oriented payment gateways are aimed at enterprises, fintech companies, and businesses that need to embed stablecoin infrastructure into their workflows. They typically offer APIs, SDKs, and developer tools for integration into existing payment systems to enable automatic payments, stablecoin wallets, virtual accounts, and real-time settlements. Emerging projects specifically focusing on developer tools include:

• BVNK: Provides enterprise-grade payment infrastructure for seamless stablecoin integration. BVNK offers API solutions to streamline processes, a payment platform for cross-border commercial payments, enterprise accounts allowing businesses to hold and trade various stablecoins and fiat currencies, and merchant services enabling businesses to accept stablecoin payments. BVNK processes over $10 billion annualized transaction volume, with a 200% annual growth rate and a valuation of $750 million. Its customers include emerging regions such as Africa, Latin America, and Southeast Asia.

• Iron (in beta): Provides APIs enabling seamless integration of stablecoin transactions into existing business workflows. It offers enterprises global fiat on/off ramps, stablecoin payment infrastructure, wallets, and virtual accounts, supporting customized payment workflows (including recurring payments, invoicing, or on-demand payments).

• Juicyway: Provides APIs for corporate payments, payroll distribution, and bulk payments, supporting currencies including Nigerian Naira (NGN), Canadian Dollar (CAD), US Dollar (USD), Tether (USDT), and USD Coin (USDC). Primarily focused on the African market, with no operational data available yet.

Consumer-oriented payment gateways focus on users, offering simple, user-friendly interfaces to facilitate stablecoin payments, remittances, and financial services. They typically include mobile wallets, multi-currency support, fiat currency on/off ramps, and seamless cross-border transactions. Some prominent projects dedicated to delivering such user-friendly payment experiences include:

• Decaf: An on-chain banking platform enabling personal consumption, remittances, and stablecoin transactions across more than 184 countries. In Latin America, Decaf collaborates with local channels, including MoneyGram, offering nearly zero withdrawal fees. It has more than 10,000 users in South America and has received high praise among Solana developers.

• Meso: A fiat-to-stablecoin on/off ramp solution integrated directly with merchants, allowing users and businesses to easily convert between fiat currency and stablecoins with minimal friction. Meso also supports Apple Pay purchases of USDC, simplifying consumers’ access to stablecoins.

• Venmo: Venmo’s stablecoin wallet functionality leverages stablecoin technology, integrated within its existing consumer payment app. This allows users to easily send, receive, and use digital dollars without directly interacting with blockchain infrastructure

b. U Cards

Crypto cards are payment cards that allow users to spend cryptocurrencies or stablecoins at traditional merchants. These cards usually integrate with traditional credit card networks (such as Visa or Mastercard), automatically converting cryptocurrency assets into fiat currency at the point-of-sale, facilitating seamless transactions.

Projects include:

• Reap: An Asia-based card issuer, whose clients include more than 40 enterprises such as Infini, Kast, Genosis Pay, Redotpay, Ether.fi, etc. It sells white-label solutions and primarily earns revenue through transaction fees (e.g., Kast 85% - Reap 15%). Partnering with Hong Kong banks, Reap covers most regions outside the United States and supports multi-chain deposits. Transaction volume reached $30M in July 2024.

• Raincards: An Americas-based issuer supporting card issuance for several companies, including Avalanche, Offramp, and Takenos. Its distinctive feature is serving users in the United States and Latin America. Raincards also launched its own USDC corporate card, allowing businesses to pay for travel expenses, office supplies, and other day-to-day business expenditures using on-chain assets (such as USDC).

• Fiat24: A European issuer and Web3 bank with a similar business model to the companies mentioned above. It supports card issuance for enterprises like Ethsign and SafePal. Licensed in Switzerland, it primarily serves users in Europe and Asia. Currently, it only supports deposits on Arbitrum and not full-chain transactions. Growth has been slow, with around 20,000 total users and monthly revenue between $100K-150K.

• Kast: A rapidly growing crypto card provider on the Solana blockchain. Kast has issued more than 10,000 cards, with approximately 5,000-6,000 monthly active users. In December 2024, its transaction volume reached $7M with a monthly revenue of $200K.

• 1Money: A stablecoin ecosystem that recently launched a stablecoin-supported credit card, providing a software development kit (SDK) to facilitate Layer 1 and Layer 2 integrations. Currently in beta, no operational data available yet.

There are numerous crypto card providers, which differ mainly in their service regions and currency support. They typically offer low-fee services to end-users to encourage active usage of crypto cards.

2. Layer 2: Payment Processors

As a key level within the stablecoin technology stack, payment processors form the backbone of payment channels and primarily cover two categories: 1. Fiat on/off-ramp providers, and 2. Stablecoin issuance providers. They act as a crucial middle layer in the payment lifecycle, bridging Web3 payments with the traditional financial system.

a. Fiat On/Off-Ramp Processors

• Moonpay: Supports over 80 cryptocurrencies, offering multiple fiat on/off ramps and token exchange services to satisfy users’ diverse cryptocurrency transaction needs.

• Ramp Network: Covers more than 150 countries, providing on/off-ramp services for over 90 crypto assets. Ramp Network handles all KYC (Know Your Customer), AML (Anti-Money Laundering), and compliance requirements, ensuring compliant and secure fiat-to-crypto services.

• Alchemy Pay: A hybrid payment gateway solution supporting two-way conversion and payments between fiat currencies and crypto assets, integrating traditional fiat payments with cryptocurrency payments.

b. Stablecoin Issuance & Orchestration Processors

• Bridge: Bridge’s core products include Orchestration API and Issuance API. The former helps businesses integrate multiple stablecoin payments and conversions, while the latter supports enterprises in rapidly issuing stablecoins. Bridge is currently licensed in the United States and Europe and has established significant partnerships with the U.S. State Department and Treasury Department, demonstrating strong compliance, operational capability, and resource advantages.

• Brale (in beta): Similar to Bridge, Brale is a regulated stablecoin issuance platform offering stablecoin orchestration and reserve management APIs. Brale holds regulatory compliance licenses in all U.S. states; cooperating enterprises must complete KYB (Know Your Business) checks, and users need to establish accounts for KYC verification. Compared to Bridge, Brale’s clientele consists mainly of blockchain OGs (such as Etherfuse, Penera), and its investor backing and business development are somewhat weaker.

• Perena (in beta): Perena’s Numeraire platform reduces the issuance threshold for niche stablecoins by encouraging users to provide concentrated liquidity within a single pool. Numeraire uses a “hub-and-spoke” model, with USD acting as a central reserve asset—a “hub” for stablecoin issuance and exchange. This mechanism enables efficient minting, redemption, and trading of multiple stablecoins pegged to different assets or jurisdictions, each connecting as a “spoke” to the central USD. Through this structural design, Numeraire ensures deep liquidity and improved capital efficiency, as smaller stablecoins can interoperate via USD* without requiring fragmented liquidity pools for each trading pair. The ultimate goal of this system design is not only enhancing price stability and reducing slippage but also enabling seamless conversion between stablecoins.

3. Layer 3: Asset Issuers

Asset issuers are responsible for creating, maintaining, and redeeming stablecoins. Their business model typically revolves around a balance-sheet approach, similar to banking operations—accepting customer deposits and investing these funds into high-yield assets such as U.S. Treasury bonds to earn interest margins. At the asset issuer layer, stablecoin innovation can be divided into three categories: static reserve-backed stablecoins, yield-bearing stablecoins, and revenue-sharing stablecoins.

1.Static Reserve-backed Stablecoins

First-generation stablecoins introduced the foundational model of digital dollars: centralized tokens issued with a 1:1 backing by fiat reserves held by traditional financial institutions. Major participants in this category include Tether and Circle.

Tether’s USDT and Circle’s USDC are the most widely used stablecoins, each backed 1:1 by dollar reserves held in Tether’s and Circle’s financial accounts. These stablecoins have been integrated into numerous platforms and serve as a major trading and settlement pair within the cryptocurrency market. Notably, the value capture from these stablecoins belongs entirely to the asset issuers themselves. USDT and USDC primarily generate revenue through interest spreads for their issuing entities rather than sharing revenues with users.

2.Yield-bearing Stablecoins

The second evolution of stablecoins moves beyond simple fiat-backed tokens by embedding native yield-generating features. Yield-bearing stablecoins provide on-chain returns for holders, typically derived from short-term treasury yields, decentralized finance (DeFi) lending strategies, or staking rewards. Unlike traditional static stablecoins that passively hold reserves, these assets actively generate returns while maintaining price stability.

Prominent protocols offering on-chain yields for stablecoin holders include:

• Ethena ($6B): A stablecoin protocol issuing USDe, an on-chain synthetic dollar backed by hedged collateral consisting of Ethereum (ETH), Bitcoin (BTC), and Solana (SOL). Ethena’s unique design allows USDe holders to earn organic yields derived from perpetual futures funding rates (currently yielding 6.00% APR), attracting users through its distinctive collateralization and yield mechanisms.

• Mountain ($152M): A yield-bearing stablecoin currently offering an APR of 4.70%. Mountain enables users to earn daily interest simply by depositing USDM into their wallets, appealing to those seeking passive returns without additional staking or complex DeFi interactions, providing users with a straightforward method of generating yields.

• Level ($25M): A stablecoin composed of liquid re-staked dollars. Level explores a novel yield-generation model by using lvlUSD to provide security for multiple decentralized networks, collecting additional yields from these networks, and then redistributing them to lvlUSD holders, innovating stablecoin yield-generation methods.

• CAP Labs (Beta): Built on the highly anticipated megaETH blockchain, CAP is developing a next-generation stablecoin engine designed to offer stablecoin holders new revenue streams. CAP stablecoins generate scalable and adaptable yields from external revenue sources such as arbitrage, maximal extractable value (MEV), and real-world assets (RWAs)—yield streams traditionally reserved for sophisticated institutional participants, opening new avenues for stablecoin yields.

3.Revenue-sharing Stablecoins

Revenue-sharing stablecoins integrate built-in monetization mechanisms, directly allocating portions of transaction fees, interest income, or other revenue streams to users, issuers, end applications, and ecosystem participants. This model aligns incentives among stablecoin issuers, distributors, and end users, transforming stablecoins from passive payment instruments into active financial assets.

• Paxos ($72M): As a rapidly evolving stablecoin issuer, Paxos announced the launch of USDG in November 2024, regulated by the upcoming stablecoin framework of the Monetary Authority of Singapore. Paxos shares stablecoin revenues and interest income generated from reserve assets with network partners that enhance utility, including Robinhood, Anchorage Digital, and Galaxy, expanding its revenue-sharing model through collaboration.

• M^0 ($106M): The M^0 team comprises former senior professionals from MakerDAO and Circle. M^0’s vision is to serve as a simple, trustworthy, neutral settlement layer enabling any financial institution to mint and redeem M^0’s revenue-sharing stablecoin, “M”. The M^0 protocol shares a substantial portion of its interest income with approved distributors, referred to as yield beneficiaries. A unique aspect of “M” compared to other revenue-sharing stablecoins is that “M” can also function as “raw material” for other stablecoins (e.g., Noble’s USDN).

• Agora ($76M): Similar to USDG and “M”, Agora’s AUSD shares revenue with integrated applications and market makers. Agora has strategic backing from market makers and applications such as Wintermute, Galaxy, Consensys, and Kraken Ventures. The revenue-sharing ratio is not fixed, but most of it is returned to partners.

4. Layer 4: Settlement Layer

The settlement layer of the stablecoin technology stack is foundational to the stablecoin ecosystem, ensuring the finality and security of transactions. It consists of blockchain networks that process and validate stablecoin transactions in real-time. Currently, numerous renowned Layer 1 (L1) and Layer 2 (L2) networks serve as key settlement layers for stablecoin trading:

• Solana: A high-performance blockchain renowned for its excellent throughput, rapid finality, and low transaction fees. Solana has emerged as a crucial settlement layer for stablecoin transactions, especially in consumer payments and remittances. The Solana Foundation actively encourages developers to build on Solana Pay and hosts PayFi conferences/hackathons to promote off-chain PayFi innovations, accelerating stablecoin adoption in practical payment scenarios.

• Tron: A Layer-1 blockchain holding a significant market share in stablecoin payments. USDT on Tron is widely used for cross-border payments and peer-to-peer (P2P) transactions due to its efficiency and deep liquidity. Tron primarily focuses on Business-to-Consumer (B2C) transactions but currently lacks adequate support for Business-to-Business (B2B) scenarios.

• Codex (beta): An Optimistic Layer-2 blockchain dedicated to cross-border B2B payments. Codex aggregates fiat on/off-ramp providers, market makers, exchanges, and stablecoin issuers, offering businesses comprehensive, one-stop stablecoin financial services. Codex has a robust distribution network and shares 50% of its sequencer fees with Circle to acquire traffic for its fiat on/off-ramp services.

• Noble: A native asset issuance blockchain designed for Cosmos and the IBC (Inter-Blockchain Communication) ecosystem. Cosmos is currently the fourth-largest issuance chain for USDC and has integrated with Coinbase. Projects integrated with Noble can deposit USDC directly into more than 90 modular IBC chains (including dYdX, Osmosis, Celestia, SEI, Injective), enabling native minting and circulation of USDC across the multi-chain ecosystem.

• 1Money (beta): A specialized Layer-1 blockchain built specifically for stablecoin payments. Transactions are processed in parallel at equal priority and fixed fees, meaning transactions cannot be reordered, and no user can jump the queue by paying higher fees. The network also offers gas-free transactions through ecosystem partners to enhance user experience, creating a fair and efficient network environment for stablecoin payments.

3. Expanding Stablecoin Adoption: Serving Non-Crypto Native Users

1. Current Bottlenecks

• Regulatory Uncertainty: Before banks, enterprises, and fintech companies fully adopt stablecoins, regulatory agencies urgently need to provide clearer policy guidelines to effectively manage risks.

• Consumer Side: The lack of use cases for stablecoins has restricted their widespread adoption among ordinary consumers. The daily payment scenarios for consumers are relatively fixed, and stablecoins have not yet deeply integrated into these scenarios. Many consumers lack practical demand and incentives to hold or use stablecoins.

• Enterprise Side: The extent to which enterprises accept stablecoin payments significantly impacts the spread of stablecoins. Currently, enterprises face dual challenges of willingness and capability when accepting stablecoin payments. On one hand, some enterprises have limited awareness and harbor concerns regarding the security and stability of this emerging payment method, leading to low acceptance willingness. On the other hand, even enterprises willing to accept stablecoin payments may encounter practical difficulties such as technical integration, financial accounting, and compliance regulation, limiting their capability to adopt stablecoins.

Despite these bottlenecks, we believe that as U.S. regulations gradually become clearer, more traditional users and enterprises will be encouraged to adopt compliant stablecoins. Although both sides may face potential frictions, such as KYC (Know Your Customer) and KYB (Know Your Business), the long-term market potential is enormous.

If we segment the market into: 1. Crypto-native users 2. Non-crypto-native users. All the interviewed projects primarily target on-chain markets, serving crypto-native users, while the non-crypto-native market remains largely untapped. This market gap presents a significant opportunity for innovative companies to establish first-mover advantages by guiding new users into the crypto space.

On-chain, stablecoin market competition is already fierce. Many participants strive to increase use cases, lock total value locked (TVL) by offering higher yields, and incentivize users to hold stablecoins. As the ecosystem evolves, future project success will depend on expanding real-world applications, enhancing interoperability between various stablecoins, and reducing frictions faced by enterprises and consumers.

2. Enterprise Side: How to Boost Stablecoin Payment Adoption?

• Integrating stablecoins into mainstream payment applications: Major payment platforms such as Apple Pay, PayPal, and Stripe have begun incorporating stablecoin transactions. This step not only significantly expands the usage scenarios for stablecoins but also drastically reduces foreign exchange costs associated with international payments, providing businesses and users a more economical and efficient cross-border payment experience.

• Incentivizing enterprises through revenue-sharing stablecoins: Revenue-sharing stablecoins prioritize distribution channels by skillfully coordinating incentive mechanisms between stablecoins and applications, thereby building robust network effects. Instead of directly targeting end-users, these stablecoins precisely target distribution channels such as financial applications. Examples of revenue-sharing stablecoins include Paxos’s USDG, M0 Foundation’s M, and Agora’s AUSD.

• Making it easier for businesses and organizations to issue their own stablecoins: Allowing ordinary businesses to easily issue and manage their own stablecoins has become a key trend driving enterprise adoption. Early pioneers in this field include Perena Bridge and Brale. With continued improvement in overall infrastructure, the trend for enterprises or countries issuing proprietary stablecoins is expected to further strengthen.

• B2B stablecoin liquidity and treasury management solutions: Helping enterprises effectively hold and manage stablecoin assets to meet their working capital needs and yield-generation goals. For instance, the Mountain protocol’s on-chain yield platform provides professional treasury management solutions for businesses, significantly enhancing corporate capital efficiency.

• Developer-focused (enterprise) payment infrastructure: Many currently successful platforms position themselves as crypto-native versions of traditional financial services, committed to offering enterprises innovative financial solutions. For instance, enterprises currently often manually coordinate liquidity providers, exchange partners, and local payment channels, making large-scale stablecoin adoption inefficient. BVNK addresses this issue by automating the entire payment workflow. BVNK also introduces a multi-rail solution that integrates local banks, crypto liquidity providers, and fiat off-chain payments into a single payment engine. Instead of enterprises managing multiple intermediaries, BVNK automatically routes funds via “the fastest, cheapest, and most reliable channels,” optimizing each transaction in real-time. As enterprise stablecoin adoption accelerates, solutions like BVNK will play a critical role in making stablecoin payments frictionless, scalable, and seamlessly integrated with global commerce by addressing inefficiencies that hinder large-scale enterprise adoption.

• Settlement networks designed specifically for cross-border payments: Specialized L1 and L2 networks designed for enterprise-to-enterprise cross-border payments or enterprise-to-consumer retail transfers. They possess notable advantages such as ease of integration and comprehensive regulatory compliance, effectively meeting payment requirements in complex business scenarios. For example, Codex is a specialized L2 built explicitly for cross-border transactions, aggregating fiat on/off-ramp providers, market makers, exchanges, and stablecoin issuers to deliver one-stop stablecoin financial services for enterprises. Additionally, Solana actively supports PayFi. Besides its inherent technological advantages, Solana proactively promotes its products to partners and local businesses, encouraging Shopify, PayPal merchants, and offline retailers (especially in regions with relatively weak banking services, such as Latin America and Southeast Asia) to utilize Solana Pay for payments. A primary trend is that competition among L1 and L2 settlement networks will no longer remain solely technological but will extend to multiple levels including developer ecosystems, business development with merchants, and traditional enterprise partnerships.

3. Consumer Side: How to Expand to Non-Crypto Native Users?

As stablecoins become easier to access and integrate into traditional financial applications, non-crypto native users will begin using them without even realizing it. Just as today’s users don’t need to understand underlying banking systems to use digital payments, stablecoins will increasingly serve as invisible infrastructure, enabling faster, cheaper, and more efficient transactions across industries.

Embedded stablecoin payments in e-commerce and remittances

Using stablecoins in everyday transactions is a critical driver of their adoption, especially in e-commerce and cross-border remittances, which suffer from inefficiency, high costs, and reliance on outdated banking networks. Embedded stablecoin payments provide the following value in these scenarios:

• Faster, lower-cost payments: Stablecoins significantly reduce transaction fees and settlement times by eliminating intermediaries. When integrated with mainstream e-commerce platforms, they can replace traditional credit card networks, enabling instant transaction finality and lowering processing costs.

• Gig economy, cross-border freelance payments, currency preservation needs in Latin America and Southeast Asia: These specific use cases generate demand for barrier-free cross-border transactions. Compared with traditional banking and remittance services, stablecoins allow gig workers and freelancers to receive funds in seconds at lower costs, making stablecoins a preferred payment solution in the global labor market.

As stablecoin payment channels become deeply integrated into mainstream platforms, their use will extend beyond crypto-native users. Eventually, consumers will unknowingly use blockchain-driven transaction services in their daily financial activities.

On-chain yield products for non-crypto users

Generating yields on digital dollars is another core value proposition of stablecoins, yet this functionality remains underexplored in traditional finance. While DeFi-native users are already familiar with on-chain yields, emerging products now offer simplified, compliant interfaces to bring these opportunities to mainstream consumers.

The key is seamlessly and intuitively onboarding traditional finance users into the realm of on-chain yields. In the past, accessing DeFi yields required technical knowledge, self-custody capability, and experience with complex protocols. Today, compliant platforms abstract away technical complexity, offering intuitive interfaces that allow users to earn yields simply by holding stablecoins, without needing deep crypto expertise.

As a pioneering protocol in this space, Mountain Protocol understands the universal value of on-chain yields. Unlike traditional stablecoins used only as transaction mediums, Mountain’s stablecoin USDM automatically distributes daily yield to holders. Its current 4.70% APR comes from short-term, low-risk U.S. Treasury bonds, making it an appealing alternative to traditional bank deposits and DeFi staking. Mountain attracts non-crypto native users by providing:

• Frictionless passive yields: Users automatically accumulate yields by simply holding USDM, without additional staking, complicated DeFi interactions, or active management.

• Compliance and transparency: USDM is fully audited, fully collateralized, and structured through bankruptcy-remote accounts, providing users transparency and investor protection comparable to traditional money market instruments.

• Robust risk management: By strictly limiting reserve assets to U.S. Treasury bonds and maintaining a USDC-denominated line of credit, Mountain minimizes risks related to bank failure and stablecoin de-pegging, alleviating common concerns among non-crypto users.

Mountain offers a paradigm shift for non-crypto users: individual consumers gain low-risk access to digital asset yields without needing DeFi knowledge, while institutions and corporate treasury departments receive a compliant, stable, and yield-bearing alternative to traditional banking products. Mountain Protocol’s long-term strategy involves deeper integration of USDM into DeFi and TradFi ecosystems, multi-chain expansion, and enhanced institutional partnerships (e.g., existing cooperation with BlackRock). These initiatives further simplify the on-chain yield acquisition path, driving stablecoin adoption among non-crypto users.

Streamlining KYC processes for seamless user onboarding

For stablecoin payments to achieve mass consumer adoption, the KYC (Know Your Customer) process must be simplified dramatically while remaining compliant. A key pain point deterring non-crypto users from entry is the cumbersome identity verification process. Leading stablecoin payment providers are now embedding KYC directly into their platforms for seamless user onboarding.

Modern platforms no longer require users to complete verification separately; instead, they integrate KYC into payment flows. Examples include:

• Ramp and MoonPay: Allow real-time KYC completion when users buy stablecoins via debit cards, minimizing manual review delays.

• BVNK: Offers enterprises embedded KYC solutions that securely and swiftly complete customer authentication without disrupting the payment experience.

Fragmentation of regulatory frameworks across jurisdictions remains challenging for KYC simplification. Top-tier service providers manage these regional compliance variations through modular KYC frameworks. For example:

• Circle’s USDC platform: Utilizes tiered verification, enabling users to perform small transactions with basic KYC, unlocking higher limits through advanced verification.

Going forward, converting KYC into an invisible and automated component of user experience will be essential for stablecoin payment providers seeking to overcome barriers to mainstream user adoption and accelerate blockchain integration.

4. The Stablecoin-Native Economy: Will Consumers Skip Fiat Currency?

Although stablecoins significantly accelerate global payments, saving considerable time and monetary costs, real-world transactions currently still rely on fiat currency on/off ramps. This creates a metaphorical “stablecoin sandwich,” wherein stablecoins merely serve as a bridge between fiat currencies throughout the transaction lifecycle. Many stablecoin payment providers focus primarily on fiat interoperability, essentially using stablecoins as temporary transitional layers between fiat currencies. However, a more forward-looking vision suggests the potential emergence of stablecoin-native Payment Service Providers (PSPs), enabling stablecoin transactions to operate natively. This implies fundamentally reconstructing the payment system, assuming transactions, settlements, and treasury management would occur entirely on-chain.

Companies like Iron are actively exploring innovations in this space, dedicated to building a future where stablecoins become not just bridges between fiat systems, but foundational to an entire on-chain financial ecosystem. Unlike other payment solutions that typically replicate traditional financial rails with stablecoins, Iron emphasizes developing an on-chain-first payment and treasury management stack. Iron anticipates a future where funds remain entirely on-chain, financial markets achieve genuine interoperability, and real-time settlement is conducted 24/7 via shared public ledgers.

Whether a future where funds remain entirely on-chain is feasible depends entirely on consumer preferences: will consumers choose to convert stablecoins back to fiat currency, settling through traditional channels, or keep their funds on-chain? Several key factors could drive this transition:

1. On-Chain Yield and Capital Efficiency

A highly compelling reason for consumers to keep funds in stablecoins is the ability to directly earn passive, risk-adjusted yields on-chain. In a stablecoin-native economy, consumers gain greater control over the use of their funds, receiving returns almost instantly that exceed traditional savings accounts. But to genuinely realize this goal, users must have access to highly attractive yield opportunities in the future, and the protocols offering these yields must reach a mature level with minimal counterparty risk.

2. Reducing Reliance on Custodial Intermediaries

Holding stablecoins significantly reduces dependence on traditional banking relationships. Today, users heavily rely on banks for account custody, payments, and access to financial services. Stablecoins enable self-custodial wallets and programmable finance, allowing users to independently hold and manage their funds without third-party intermediaries. This is particularly valuable in regions experiencing banking instability or limited access to financial services. Although self-custody is increasingly attractive, most non-crypto-native users either lack awareness or remain cautious about managing funds in this way. To further advance this self-custody model, consumers may demand additional regulatory safeguards and powerful user-friendly applications.

3. Regulatory Maturity and Institutional Adoption

As stablecoin regulation becomes increasingly clear and their acceptance grows, consumer confidence in the long-term value stability of stablecoins will steadily increase. If large enterprises, payroll providers, and financial institutions begin settling transactions natively with stablecoins, consumer demand to convert back to fiat currency will significantly diminish. This mirrors the gradual consumer shift from cash to digital banking; once new infrastructure is widely adopted, the need for traditional systems naturally decreases.

It’s important to note that transitioning to a stablecoin-native economy may ultimately disrupt many existing payment channels. If consumers and businesses increasingly prefer storing value in stablecoins rather than in traditional fiat bank accounts, this will substantially impact existing payment systems. Credit card networks, remittance companies, and banks primarily rely on transaction fees and foreign exchange spreads for revenue, whereas stablecoins can settle instantly on blockchain networks with minimal costs. If stablecoins can circulate freely within a country’s economy, traditional payment intermediaries may eventually be displaced.

Moreover, a stablecoin-native economy poses a challenge to fiat-based banking business models. Traditionally, deposits serve as the foundation for loans and credit creation. If funds remain on-chain, banks could face deposit outflows, reducing their lending capabilities and ability to earn revenue from client funds. This could accelerate the transformation of the financial system, prompting decentralized, on-chain financial services to gradually replace banks’ traditional roles.

Clearly, as long as incentives favor keeping funds on-chain, a theoretical stablecoin-native economy has the potential to become reality. This shift will be gradual; as on-chain yield opportunities increase, banking frictions persist, and stablecoin payment networks mature, consumers may increasingly opt for stablecoins over fiat currency, causing certain traditional financial rails to gradually become obsolete.

5. Conclusion: How Can We Accelerate Stablecoin Adoption?

• Payment Application Layer: Fully simplify the consumer experience, build regulatory-first stablecoin solutions, and provide lower prices, higher asset yields, and faster, more convenient transfers compared to Web2 payment rails.

• Payment Processor Layer: Focus on building enterprise-friendly, ready-to-use infrastructure middleware. Due to the nature of their business, payment processors must meet different licensing and compliance requirements across various regions, resulting in a relatively fragmented competitive landscape.

• Asset Issuer Layer: Actively distribute stablecoin yields to non-crypto native companies and ordinary users, incentivizing users to hold stablecoins instead of fiat currency.

• Settlement Network Layer: Competition among Layer 1 and Layer 2 settlement networks will extend beyond technology, involving developer ecosystems, business development with merchants, and partnerships with traditional enterprises, thus accelerating stablecoin payments’ integration into daily life.

Of course, large-scale adoption of stablecoins not only depends on innovative startups but also on collaboration with established financial giants. In recent months, four major financial institutions have already announced their entry into the stablecoin market: Robinhood and Revolut are launching their own stablecoins, Stripe recently acquired Bridge to enable faster and cheaper global payments, and Visa, despite having its own interests, is assisting banks in launching stablecoins.

Additionally, we have observed Web3 startups leveraging these established distribution channels, integrating crypto payment products into existing mature companies through software development kits (SDKs), and offering users diverse payment options in both fiat and cryptocurrencies. This strategy helps solve the cold-start problem, building trust with enterprises and users from the outset.

Stablecoins have the potential to reshape the global financial transaction landscape, but the key to mass adoption lies in bridging the gap between on-chain ecosystems and the broader economy.

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